Foriba reached $15M revenue from 10 countries in a very short period of time and recently got acquired to the global tax software provider Sovos. Koray, the founder of the successful e-invoicing solution, Koray was my guest in episode 3 of the Glocal Podcast. I’ve deliberately asked him whether he will be selling the company anytime soon, he apparently befooled me :)
"We grow our revenue every year, profitably and we have just begun to grow fast internationally as well. Of course, some companies approach us as a potential acquisition target, but we are only focused on further expanding Foriba - Koray"
Foriba aimed to scale globally but had to follow a much different path than a lot of the other SaaS companies since it was navigating in heavy regulated industry with different dynamics and requirements depending on the country. Below is a short summary of insights from Foriba’s expansion efforts through country-specific localization.
Foriba team had a unique experience in SAP integrations. Leveraging on this skill-set, the team entered the e-invoicing market, right after the regulation requirement by the Turkish government. With comprehensive and flexible SAP capabilities, Foriba managed to acquire most -if not all- enterprises that were readily using SAP in Turkey. Foriba continued to expand within its customer either through departments and subsidiaries or through expanding the product to cover adjacent needs.
The screenshot, taken from Foriba’s homepage, shows the importance of SAP for Foriba’s growth strategy. Foriba continues to play this platform game by fully integrating its solution to well-known enterprise providers.
Surprising enough, Turkey is one of the leaders in pushing the e-invoicing regulation. Initially targeting large telecom operators in Turkey, Foriba was well prepared, with millions of customer invoices generated electronically every month, even before the regulation was issued. Starting in a more advanced and mature market, unlike a lot of the SaaS startups from Turkey, developed a very extensive solution tailored towards the enterprise.
"Every month, $20B of invoices are generated through Foriba. If we consider the total e-invoice volume, around 65% in Turkey is generated through our platform. - Koray"
As the e-invoice regulation was passed in different countries, Foriba acted fast to become one of the first players in the market with an end-to-end solution and an SAP-centered toolbox.
Importance of multinationals
Foriba, since its first days in Turkey, targeted large companies and particularly focused its efforts on multinational enterprises. As the local subsidiaries recommended Foriba to other offices around the globe, this naturally became Foriba’s new market entry strategy. The backbone to Foriba’s expansion playbook, these multinationals became the first Foriba customers in different corners of the globe.
Amongst Foriba’s 10 thousand customers in Turkey, 450 are multinationals. As seen in the screenshot above, almost all of the big names are in the company portfolio.
Re-seller partners and network projects
As the consulting companies recommended the product to their customers, they became natural Foriba re-sellers. Accelerating Foriba’s growth, this pushed Foriba to allocate resources and form different sales partnerships for more scalability.
Foriba had an intention to sell to SMEs as well but needed to find a way to do this cost-effectively, with short and cheap sales cycles. The company signed partnerships with more than 200 accounting software to provide automated e-invoicing to their SME customers. All 3 million SMEs in Turkey will be required to issue e-invoices soon or later, so the potential here is even larger!
Lastly, Foriba partnered with Uber and Shell to generate automated e-invoices for their customers and dealers through Foriba. These network projects enabled Foriba to gain hundreds of thousands of e-invoices by only a handful of network customers.
"Reaching and selling to SMEs is very costly and unfortunately not profitable. But our partnerships and network projects were our main drivers of growth in 2018. - Koray"
Horizontal product growth
Aware of the adjacent products and integration needs of its corporate customers, Foriba decided to build new products around e-invoicing. Providing a number of solutions like e-ledger, e-archive, e-backup, and e-dispatching, Foriba increased its revenue per account and built on its defensibility within customers.
Foriba started to work on a supply chain financing solution, after realizing that such a solution would bring the company’s potential volume to a new level. Following the land and expand strategy within customers, Foriba continues to build high value-added products that also increase the entry barrier and prevent competitors from setting foot.
Market consolidation and mergers
Foriba bought its largest competitor in Turkey, ISIS, to be the indisputable leader in the market. In our interview on Glocal, Koray mentioned that local and global mergers will continue to consolidate the market and create globally leading solutions. In that context, Koray openly said that he considers acquisitions as the only way for Foriba to have a leading position internationally.
"Mergers are critical to grow in international markets and dominate multiple countries. - Koray"
Foriba got acquired by Sovos only a few months after this episode was published. Foriba has a number of strategic values that depend on the type of acquirer. Sovos, aiming to be the largest in the world with offices in 10 countries, has a large platform with a lot of enterprise capabilities, including e-invoicing. Now positioned as the leader in the Turkish market as well, I believe Foriba’s SAP competencies also played an important role in the acquisition. Through SAP-centric solutions and the multinational customer portfolio, Foriba will help Sovos grow faster and increase product development agility.